Two-thirds of Family Businesses Do Not Survive a Transfer

Seven out of ten transfers of family businesses to succeeding generations don’t end well because founders hold onto too much control. As a result, the next generation can’t do business effectively, or new directors are too cautious to keep the business profitable. But improvements can be achieved by drawing up plans at an early stage, continuing to invest in innovation and remaining decisive. These are the key conclusions of Nieuw bloed, nieuwe koers (New blood, new course), a study carried out by Rotterdam School of Management, Erasmus University (RSM) in co-operation with Rabobank and BDO Accountants & Advisors.

Entrepreneur or steward?

According to ERIM researcher Dr. Pursey Heugens, of the Erasmus Centre for Family Business (ECFB), “In many cases, founders hand over the reins of the business without really trusting their successors. Measures frequently remain in place that ensure that de facto control is retained by the old guard. This kind of situation is detrimental to the entrepreneurship of the succeeding generation; they are already inclined to see themselves as stewards or trustees of the business rather than as entrepreneurs. A record number of family businesses are expected to change ownership in the next few years.”

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